The Cato Journal

The Cato Journal is a leading free-market public policy journal. The Cato Journal features articles discussing politics and the economy of interest to scholars and professionals but accessible to a general audience as well.

Articles from Vol. 22, No. 2, Fall

Back-Alley Banking: Private Entrepreneurs in China
Kellee S. Tsai Ithaca, N.Y.: Columbia University Press, 2002, 316 pp. There is a popular saying in China: "Whenever there are policies from the top, the bottom produces counterstrategies" (shangyou zhengce, xiayou duice). According to Kellee...
Banking Collapse and Restructuring in Indonesia, 1997-2001
Indonesia's banking sector was devastated by the crisis that began in October 1997. Of the largest banks--the seven original state banks and the ten largest formerly private banks--none managed to remain solvent, and those that still operate under...
Economic Development and Freedom: The Legacy of Peter Bauer
A Hero of the Market Revolution The death of Peter Bauer on May 2, 2002, at 86 years old, marked the passing of a great economist and a hero of the market revolution that has been sweeping the globe. In recognition of his pioneering work in development...
Economic Growth and Poverty: In Search of Trickle-Down
It seems obvious that economic growth should reduce poverty, yet the issue remains controversial. Some scholars assert that economic growth does not eliminate poverty and may exacerbate the problems of the poor (United Nations 1997). For example,...
Hong Kong's Mandatory Provident Fund
The population of Hong Kong is relatively young when compared with many developed economies, but is getting older quite rapidly. Today people aged 65 and above account for about 10 percent of the population. This proportion is projected to be 13...
Interest-Bearing Currency and Legal Restrictions Theory: Lessons from the Southern Confederacy
Instances of interest-bearing currency are relatively rare. The Southern Confederacy issued both interest-bearing and non-interest-beating notes during the Civil War. The two types of notes apparently circulated alongside one another with the interest-bearing...
Justice and Its Surroundings
Anthony de Jasay Indianapolis, Ind.: Liberty Fund, 2002, 351 pp. Justice and Its Surroundings is a brilliant work. It is also at times a difficult and a challenging work; the argument sometimes requires substantial effort to follow and it often...
On the Death of the Phillips Curve
There is no evidence of a Phillips curve showing a tradeoff between unemployment and inflation. The function for estimating the non-accelerating inflation rate of unemployment (NAIRU) has been incorrectly formulated. Indeed, the unemployment rate...
Rent Seeking and Economic Growth: Evidence from a Panel of U.S. States
Rent-seeking behavior would include all of the various ways by which individuals or groups lobby government for taxing, spending and regulatory policies that confer financial benefits or other specific advantages upon them at the expense of the...
Rethinking Foreign Aid
Recent years have witnessed escalating criticism of the industrialized word for declining levels of foreign aid, especially the official development assistance (ODA) that is expressly supposed to facilitate prosperity in the developing world. Criticism...
The American Railroad Network during the Early 19th Century: Private versus Public Enterprise
At the founding, the United States were a bunch of experiments in self-government (note the use of the plural). Each state was very much free to determine its own destiny. Many states directed economic development through state enterprises, loan...
The Impact of Taxation on Unemployment in OECD Countries
There have been numerous studies of the impact of labor market rigidities on unemployment rates. The general conclusion for both OECD as well as other countries is that rigidities explain a significant part of the observed international variation...
The Need for Monetary Reform in Mexico
There is perhaps no more striking feature in Mexico's economic history than the persistent instability of the general level of prices. For any sufficiently long period for which there are reliable statistics, high and variable inflation is a consistent...
The Rule of Law in America
Ronald A. Cass Baltimore: The Johns Hopkins University Press, 2001, 214 pp. The idea of the rule of law is powerfully engrained in our constitutional culture. Indeed, as Ronald A. Cass, dean and professor of law at Boston University School of...